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December rate hike odds hold higher after Fed statement

The Federal Reserve Bank building in Washington, D.C.
Kevin Lamarque | Reuters
The Federal Reserve Bank building in Washington, D.C.

The Federal Reserve's latest meeting statement maintains the case for a rate hike in December, according to fed funds futures watched by Wall Street analysts.

David Lefkowitz, senior equity strategist at UBS Wealth Management Americas, said that based on fed funds futures, the odds for a December hike were little changed after the Fed's 2 p.m. EDT statement.

"The market seems to be pricing in rate hikes down the road but not much change in the short term. Again, the moves (in fed funds futures) are very small, not very large," he said.

In the minutes immediately after the statement release, fed funds futures showed markets were pricing in a roughly 62 percent chance of a rate hike in December, versus about 59 percent prior, according to Ryan Larson, head of equity trading, U.S., at RBC Global Asset Management. Expectations for November also briefly edged higher, spiking to 36 percent after the Fed statement versus near 30 percent before, Larson said.

Odds for November had fallen to near 22 percent late Wednesday afternoon, while the probability for December was still around 60 percent, Larson said.

The Fed kept the fed funds rate range unchanged between 0.25 and 0.50 percent on Wednesday, as expected.